Huge debts dent Jubilee regime's score on economy

On the campaign trail in 2013, Jubilee leaders were optimistic that technology, infrastructure and access to trade would drive Kenya's growth.

Their promise to actualise the dream remains largely unfulfilled four years down the line and Kenya's business community and consumers are getting less value for their money today.

On the economic front, the administration made progress in some areas. It however bumped into a number of landmines, notably a ballooning debt level fuelled by heavy Government borrowing. The shilling also lost 12 percent points against the US dollar and the interest rate regime has been experiencing instabilities.

President Uhuru Kenyatta and his deputy William Ruto failed to offer a satisfactory account of how Eurobond billions were used and the figures Treasury Cabinet Secretary Henry Rotich was churning out did not add up.

Under the Jubilee administration, Kenya's economy was to grow by 10 per cent and create at least a million jobs each year, with Ruto repeatedly affirming that the days of commercial banks hiking interest rates were numbered.

Key among the concerns of Kenya's business community and consumers is the unprecedented borrowing spree adopted by Jubilee. The country's external debt has risen to a record high, with the latest figure by the International Monetary Fund (IMF) placing the country's total debt at Sh2.3 trillion.

"The Government is way ahead of schedule with its domestic borrowing programme, having borrowed Sh208.2 billion for the current fiscal year compared to a target of about Sh155.1 billion," stated financial investment firm Cytonn in its corporate governance report released yesterday.

Allegations of corruption and misappropriation of the Sh2 billion Eurobond and other emerging scams have cast the country in bad light, dampening investor confidence .

The same applies for the promised double-digit GDP growth which, to economists, already sounded far-fetched.

According to the World Bank, Kenya's falling manufacturing output and stagnating agricultural yields make it nearly impossible to achieve a double digit growth with the current market and trade policies.

This directly impacts on the ability of the economy to absorb the growing number of unemployed educated and skilled people.

Other crucial economic sectors that have had inadequate policy intervention despite having potential include tourism, manufacturing and agriculture. Kenya's trade with its neighbours has been poor despite the country's expansionary foreign exchange policy.